Fed Nominee Yellen Rejects Idea of Audit
Janet Yellen, President Barack Obama’s nominee for chairman of the Federal Reserve Board, said she would not support an audit of the Fed, calling the U.S. central bank one of the most transparent in the world.
Sen. David Vitter (R-La.) asked Yellen during her confirmation hearing before the Senate Banking Committee on Thursday if she would publicly support S. 209, which would require a full audit of the Fed.
“I strongly, as I've indicated, support transparency and openness on the part of the Fed and I think with respect to monetary policy, in terms of the range of information and the timeliness of that information, we are one of the most transparent central banks in the world,” Yellen responded.
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“What I would not support is … any requirement that would diminish the independence of the Federal Reserve in implementing and deciding on implementing a monetary policy. For 50 years Congress has recognized that there should be an exception to GAO ability to audit the Fed to avoid any political interference in monetary policy,” the current Fed vice chair said.
Yellen said the Fed must remain independent.
“I believe it's critically important to the economic performance of this country, and we've seen this around the world, that allowing the central bank to be independent in formulating monetary policy is critical to assuring markets and the public that we will achieve price stability,” she said.
“I would be very concerned about legislation that would subject the Federal Reserve to short-term political pressures that could interfere with that independence.”
The Federal Reserve Transparency Act of 2013, sponsored by Sen. Rand Paul (R-Ky.), currently has 27 co-sponsors including Senate Minority Leader Mitch McConnell (R-Ky.), Sen. Ted Cruz (R-Texas) and Sen. Marc Begich (D-Alaska).
Current Fed Chair Ben Bernanke plans to step down at the end of January.